Two companies -- Pilgrim's Pride and Tyson Foods -- are in a bidding war to buy Hillshire. The company said it will hold separate talks with the companies after Pilgrim's Pride raised its bid for Hillshire to $55 a share, $5 more than what Tyson Foods offered last week.

Hillshire's closing stock price of more than $58 is a sign that investors believe Pilgrim's Pride and Tyson are willing to offer much more for Hillshire.

It's been a quiet week so far, with summer setting in and trading slowing down. Investors had one piece of economic data to interpret Tuesday.

Orders to U.S. factories rose for a third consecutive month in April, the latest evidence that manufacturing was regaining momentum after a harsh winter. Factory orders rose 0.7 percent in April, better than the 0.5 percent rise that economists expected.

The factory orders data was the third manufacturing report in two days. On Monday, reports on U.S. and Chinese manufacturing activity came in above expectations. That helped send both the Dow and S&P 500 to record highs for the second straight trading day. The S&P 500 closed at an all-time high of 1,924.97 that day, while the Dow ended at 16,743.63.

"The economic data here continues to get incrementally better," said Quincy Krosby, a market strategist for Prudential Financial. "But Friday's jobs report is the big number this week.

On that day, investors will get the May U.S. jobs report. Economists expect that companies hired 220,000 workers last month, and that the unemployment rate remained steady at 6.3 percent, according to FactSet.